Dell Inc to go private in a $24.4 billion deal

Posted by Chris Bell February 7, 2013 0 Comment 372 views


On Tuesday Dell CEO Michael Dell told media that he is ready to take Dell Inc private in a $24.4 billion buyout deal which will include Silver Lake and Microsoft Corporation. On the other hand, Microsoft has also said that it will provide a $2 billion loan to Dell Inc for completing the buyout. This buyout will be the biggest deal since financial crisis. By completing this buyout Dell wants to turn around the struggling computer company without worrying about Wall Street.

The deal requires approval from a large number of shareholders excluding Michael Dell himself and will end the 24 year long run of a company on Wall Street. Dell execs said on Tuesday that company will use a strategy for expanding it’s “software and services” business for large enterprises. They said that Dell has a goal of becoming the full service provider for companies just like the highly profitable IBM. Executives played down the guesses which were saying that Dell may spin off the low margin PC business and said that company will continue in low margin PC business too as company’s foundation has been built on that business.

However, Dell did not disclose that what it is going to do with itself by going private. This thing angered some shareholders who said that they needed more information for deciding whether the price of $13.65 per share is adequate for them or not.

On the other hand, David Frink, a Dell spokesman said that strategies and moves which will be taken after making company private have been thoughtfully reviewed by the “Board of Directors” of Dell Inc. He added that shareholders have been offered the best possible share prices for this deal.

Although share prices of the company were more than $18 per share one year ago, still many analysts think that the deal will be accepted easily by a large number of shareholders because many of them don’t see a future in the traditional PC market.

Dell was being rewarded as a ‘model of innovation’ since early 2000s. It is a company that was started from a dorm room just like Facebook, and rose quickly for becoming the largest manufacturer of PC business worldwide. The company has been publicly listed on Wall Street from a long time span of 24 years. If there would be no tablets and smartphones, then this company could run for longer time in the race.


About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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